As this article shows the CPI is connected to lower wages leveling rising costs to give this lower inflation rate. That does not mean we are not experiencing high inflation-----it simply means our low wages off-set those prices by not allowing us to purchase things. This in turn creates the conditions of stagnation-----US citizens cannot purchase or consume so the economy is stagnant. This is how neo-liberals and neo-cons are deliberately keeping the economy stagnant as they expand overseas earning billions of dollars in profit while moving US citizens deeper into poverty.

Economy & Policy

If There’s No Inflation, Why Are Prices Up So Much? Many of the costs faced by typical American households are rising faster than the official inflation statistics indicate. By Michael Sivy@MFSivyMarch 12, 2013 Time

Last week, I ran out of ink for my printer and ordered some more online. My computer automatically pulled up the previous order, and I was shocked to see that the price of the ink cartridges I was buying had gone up 25%. To my mind, ink always seems overpriced. Manufacturers sell printers cheaply because they know that they can make lots of money on the ink. For the same reason, John D. Rockefeller’s Standard Oil is said to have sold millions of cheap kerosene lamps in order to make big profits selling kerosene. But since ink cartridges were already priced way above cost and official statistics show little general inflation, why had ink gone up 25% in less than a year? Price hikes for a particular item here or there don’t qualify as inflation. If one thing gets more expensive but something else gets cheaper, that’s what economists call a relative price change. Inflation is a simultaneous increase in prices across the board. Some measures of inflation, such as the GDP Deflator, track price changes that affect businesses as well as those that affect consumers. But the Consumer Price Index is supposed to focus on inflation at the consumer level. And the CPI has recorded minimal increases over the past four years. Since the recession ended, the 12-month change in consumer prices has averaged 2% and has never been as high as 4%.

There are lots of other ways to gauge inflation, however, that give very different signals. Gold was $930 an ounce when the recession ended, and today it’s $1,583. So if you believe in the gold standard, prices have increased 70% in four years – or an annualized rate of 14.2%. Of course, many economists dismiss the gold price as an archaic indicator. So it may be more meaningful to look at price increases over a broad range of commodities. The Reuters CRB Commodity Index, which tracks the prices of coffee, cocoa, copper, and cotton, as well as energy, is up 38% over four years, or 8.6% at a compound annual rate. It may well be that these increases in the cost of raw materials aren’t translating into broader inflation because the economy is so weak. For sustained inflation to get going, workers have to be able to demand higher pay to make up for increases in their cost of living. And today, whatever inflation is caused by the rising cost of raw materials is being offset by below-normal increases in wages. Indeed, that’s one of the factors causing the decline in real after-tax household income that I wrote about last week. That may result in price stability for the overall economy, but it isn’t great news for middle-class American families. It’s true that some important costs have remained moderate. Food prices may fluctuate from season to season, but overall they have risen at only a 2% compound rate since 2009. And in the current real estate market, housing costs haven’t gone up much either. Nonetheless, many of the everyday costs that Americans face have risen a lot.The price of gasoline has gone up from $2.60 a gallon when the recession ended to $3.68 today. That’s a 41% increase in four years, or an annualized rate of 9%. Taxes have gone up almost as much. Federal, State and Local income taxes and social charges (Social Security payroll taxes, for instance) have risen 35% over four years, an annualized rate of 7.8%. (MORE: Not Knowing About This Credit Report Can Burn You) Perhaps the most telling indicator – albeit a slightly facetious one – is the Big Mac index, popularized by the Economist magazine. McDonalds hamburgers are available in many countries and their prices reflect the cost of food, fuel, commercial real estate, and basic labor. The price of a Big Mac, therefore, can be used to compare the economies of different countries – or serve as a bellwether of inflation in a single country. Since the recession ended, the cost of a Big Mac in the U.S. has risen from an average of $3.57 to $4.37, or 5.2% a year. So why haven’t these more rapid increases shown up in the Consumer Price Index? One reason is that the index itself has been modified in a variety of ways over the past 35 years. Fluctuations in home prices have been smoothed out, for example. And the index has been adjusted periodically to reflect changes in what people buy, particularly if they shift from more expensive items to cheaper ones. Such revisions to the CPI have tended to reduce the official inflation rate, on balance. Various estimates of what the annual rate would have been over the past four years if earlier methods of calculation had been continued come up with numbers in the 5%-to-10% range. Several conclusions can be drawn from all this. First, there is no absolute and objective gauge of inflation. Any particular measure is simply one way of making the calculation, based on a host of assumptions. Second, a number of the costs that middle-class households face are going up considerably faster than the CPI. Printer-ink cartridges may be a particularly obnoxious example, but they’re not the only case where prices are rising more than official statistics indicate. At the moment, these trends aren’t highly visible because the economy is so sluggish. But as the recovery continues, there’s every reason to think that they will become more widespread.

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The failure to address the COLA and CPI relevancy for decades has always been met with fixes needed to keep Social Security strong. What is called Chain E is this fix. We had a super-majority of democrats holding both chambers of Congress and a democratic President and we could not get a vote for Chain E----because they are all neo-liberals, not democrats.

What has happened with the Federal Reserve's Bernanke and Obama is worse-----they have manipulated by no legal means the inflation to zero reeking havoc on the economy as they will no longer be able to keep the market under control when inflation cannot be hidden. That is what is about to break loose under Yellen. So, what is happening now supersedes the argument below between Chain E and Chain W-----it is outright criminal manipulation simply to allow Wall Street to leverage and move free money to the top in record amounts while moving you and I deeper into debt and our social benefit payments like Social Security falling substantially. Since Obama and Bernanke came on board seniors have had several years of zero and 1% COLA increases to Social Security instead of the 3-4% for decades----- at a loss of a hundred or more dollars a month.....that is a lot especially as costs spiral at 30% or more.

This article is a good explanation of the real debate and how Chain E starts to account for current cost of living.Please glance through to see the arguments from both sides. Note that the increase in allotments to Social Security recipients with Chain E will maybe cut the life expectancy of the SS Trust by a few years. The calculations saying this are conservative at best and the effects may be minimal. So, Chain E is the policy we should see from democrats. Only a very few in Congress are advocating it.

Current Issues in Economics and Finance Social Security and the Consumer Price Index for the Elderly

May 2003Volume 9, Number 5 Contact Author JEL classification: J14, E31View PDF version 7 pages / 136 kb Authors: Bart Hobijn and DavidLagakos Federal Reserve Bank of New YorkSome argue that social security benefits should be adjusted using a price index that reflects the spending habits of the elderly rather than those of workers. This study suggests that if such an index were adopted today, over the next forty years benefit levels would increase and the social security trust fund could become insolvent up to five years sooner than projected.Social security benefits, paid monthly to almost 30 million Americans, are automatically adjusted for inflation once a year. The goal of this cost-of-living adjustment is to prevent a decline in the purchasing power of retirees’ benefits. Under the current system, the adjustment is tied to changes in the consumer price index (CPI), the benchmark measure of inflation produced by the Bureau of Labor Statistics (BLS).In recent years, the indexing of social security benefits to the CPI has come under considerable scrutiny. Many policymakers and academics have argued that the CPI overstates price changes for individual goods and services,1 while others have questioned the techniques used to combine these changes into an aggregate measure. In this edition of Current Issues, we examine another, less frequently discussed weakness of the indexing procedures—the linking of benefit changes to price movements that affect the working population rather than retirees.Currently, adjustments to social security benefits are based on the CPI-W, a measure that captures price changes in the average set of goods purchased by urban wage earners and clerical workers. The purchasing patterns of the typical retiree differ significantly, however, from those of the typical worker: Medical care, for example, constitutes a much larger share of total expenditures for seniors. Mindful of these differences, some have urged that social security benefits be adjusted using a price index that captures the spending habits of older Americans.2 Since the early 1980s, the BLS has calculated such an index: the consumer price index for elderly consumers (CPI-E). This experimental index has never been used to adjust benefits, however, and while several congressional bills have been put forward on the subject, none has passed.3Our analysis addresses a simple question: How would adoption of the CPI-E to index social security benefits affect the level of benefits paid and the resources of the social security trust fund, which finances the benefits that seniors receive? Our calculations suggest that introduction of the CPI-E would present policymakers with a serious trade-off: By choosing to maintain the purchasing power of seniors over time, they would accelerate the projected insolvency of the social security trust fund, known officially as the Old-Age and Survivors Insurance (OASI) trust fund. We find that between 1984 and 2001—the years for which data are available—annual inflation under the CPI-E was on average 0.38percent higher than it was under the CPI-W, with medical care accounting for much of the difference.4 Accordingly, we estimate that if the CPI-E had been adopted in 1984, the average benefit in 2001 would be 3.84percent higher, or roughly $408 more per year per recipient. Our calculations also reveal that if the index were adopted today, the OASI trust fund could become insolvent five years sooner than the currently projected 2043, provided that inflation for the elderly continues to exceed inflation for workers at the average annual rate observed between 1984 and 2001.Differences between the CPI-W and the CPI-E

If inflation rates under the CPI-W and CPI-E tended to coincide in any given year, then the economic implications of switching to the CPI-E would be minimal. However, as Chart1 illustrates, important differences do exist.5 Most significantly, for all years in our data except 1999, CPI-E inflation was higher than CPI-W inflation, with an average annual difference of 0.38percent. It is worth noting that this difference was higher in the early period of our sample than in more recent years. Specifically, in the 1984-93 period, it was 0.50percent, and in the 1994-2001 period, 0.22percent. The underlying reason for these differences can be found largely in the weights of the major goods categories that make up each index—weights that represent the share of total expenditures that each category constitutes (seetable). Housing represents a much larger weight for the elderly, 45.9percent, than the 37.6percent for urban workers. Similarly, medical care makes up 10.24percent of the CPI-E, compared with 5.06percent of the CPI-W. Each of the other major categories has a smaller weight in the CPI-E—in fact, transportation, education, and food have substantially smaller weights for the elderly.To identify the categories most responsible for the difference in inflation under the two indexes, we recalculate for each category what the difference would have been if that category had been excluded from both indexes. These counterfactual differentials help explain which categories increase and which diminish the CPI-E–CPI-W difference.Chart2 presents our results. The bar corresponding to each category represents the counterfactual CPI-E–CPI-W differential that results from excluding only that category from each index. Note that by excluding any category that increases the CPI-E–CPI-W differential, we obtain a counterfactual difference that is smaller than the currently observed average of 0.22percent. Likewise, the exclusion of any category that decreases the difference gives a counterfactual that is larger than the actual difference. From the chart, we see that housing, apparel, medical care, recreation, and transportation have increased the CPI-E–CPI-W differential between 1994 and 2001. As expected, medical care is the largest single contributor to the difference, owing to the fact that seniors spend more on this category than do workers and that medical care has experienced much higher than average inflation over our sample period. The same is true for housing. Apparel, transportation, and recreation, however, are categories with below-average inflation, upon which seniors spend less in general than do workers. It follows, then, that these categories increased the CPI-E–CPI-W differential. Conversely, the categories education, food, and other (made up largely of tobacco products) tended to reduce the difference between the indexes. Education did so primarily because the typical senior spends less than the typical worker on college tuition, which has experienced above-average inflation since 1994. The same holds true for “food away from home” and cigarettes, which are components of food and other, respectively: both are higher inflation goods upon which seniors spend less.

Maintaining the Purchasing Power of Seniors

The differences between the CPI-W and the CPI-E clearly have implications for social security recipients. We contend that adoption of the CPI-E would increase benefits in times of above-average inflation for seniors. But by how much would they actually increase? This question is apt to be of interest to policymakers as well as to current and future social security recipients, because the answer will suggest just how significant the benefits of CPI-E adoption will be relative to the costs. That is to say, although in theory it is worthwhile to ensure that the real value of benefits remains constant over time, in practice it is also important to confirm that declines in the real value of benefits are, or could be, substantial before a new index is employed. Differences each year of a few cents per beneficiary, for example, likely would not justify the costs to the BLS and the Social Security Administration (SSA) of calculating the CPI-E and readjusting benefits.6We argue that increases in benefits resulting from CPI-E indexation would in fact be significant. This assertion is based on our calculation of what average OASI benefits would be today if the index had been adopted in 1984, our first year of data. We find that overall, benefits in 2001 would have been 3.84percent higher. This percentage corresponds to an average monthly benefit of $912, as opposed to the current $878, which sums to $408 annually per beneficiary.7 Thus, assuming that the CPI-E reasonably represents the spending patterns of the elderly, seniors have experienced a nontrivial drop in their spending power since 1984.The Effect of CPI-E Indexation on the Social Security Trust Fund

The OASI trust fund, operated by the Social Security Administration, is projected to become insolvent in 2043 because of the prospective aging of the U.S. population. It is therefore important to consider the effect that adoption of CPI-E indexation might have on the fund’s future resources.If inflation continues to be higher for the elderly than for workers, introduction of the CPI-E now would no doubt speed up insolvency. Accordingly, the question we address is, When would the OASI trust fund become insolvent if indexation were to begin today? To answer this question, we consider three possible scenarios for the fund, each with a different assumption about future differences in inflation for the CPI-E and the CPI-W. The Social Security Administration arrives at its current estimate of fund insolvency by assuming, among other things, that future inflation will be 3percent each year. We take this to be the SSA’s best estimate of future inflation under CPI-W indexation, or equivalently, its best estimate of inflation under CPI-E indexation assuming no future difference in the CPI-E and the CPI-W. Our analysis compares this 3percent scenario with two others. We consider when insolvency would occur assuming future inflation rates of 3.38percent and 3.22percent per year—figures projected by the SSA that correspond to inflation rates for the elderly that are 0.38 and 0.22 percent higher, respectively, than the current 3percent rate under the CPI-WFor consistency with the SSA’s forecasts, we report these projections by incorporating several of the agency’s terms: the income rate, the cost rate, and the trust fund ratio. The income rate is defined as the fund’s payroll tax receipts expressed as a percentage of the taxable payroll. It is essentially the average payroll tax rate faced by contributors to the fund. For example, the income rate of the OASI trust fund in 2001 was 10.88, indicating that the average earner paid 10.88percent of his or her salary in taxes to the fund. The cost rate consists of trust fund outlays expressed as a percentage of the taxable payroll. As long as the income rate exceeds the cost rate, tax receipts will exceed outlays and the fund will accumulate assets. However, when the cost rate exceeds the income rate, the fund’s asset holdings will be diminished whenever the interest income from the assets does not cover the gap between spending and tax receipts.Chart3 presents the income rate and the projected cost rates under our three scenarios of future inflation rates. The implicit assumption behind these scenarios is that CPI-E indexation will affect projected OASI outlays but not projected tax receipts. Therefore, the projected income rate according to our scenarios coincides with the rate projected by the Social Security Administration. What differs under the three scenarios is the projected cost rate.Worth noting from Chart3 is that according to the current 3percent projection of inflation, the fund would start running a deficit in 2018. Under each of the other two scenarios, the fund would begin to operate at a deficit in 2017. Not evident from the chart, however, is the more important question of when the trust fund will become insolvent. To answer this question, we introduce another key term used by the Social Security Administration: the trust fund ratio. The ratio expresses the OASI trust fund’s level of asset holdings at the end of the previous year as a percentage of the current year’s outlays. For example, a trust fund ratio of 247 in 2001 indicates that asset holdings at the end of 2000 were 2.47 times expenditures in 2001. This means that without additional income and at 2001 expenditure levels, the trust fund would remain solvent for another 2.47 years. A trust fund ratio of zero indicates that the fund would not be able to make any expenditures without additional income—the point at which we consider insolvency to occur.The projected trust fund ratios under our three future inflation rate scenarios are depicted in Chart 4. The chart shows that the current projection for fund insolvency is 2043, which is equivalent to the scenario of adopting the CPI-E and experiencing no future difference in CPI-E and CPI-W inflation. Under the other two scenarios, however, this date will come sooner. When inflation for seniors is 0.22percent higher each year, we estimate that the fund will become insolvent in 2041--two years earlier than currently projected. When it is 0.38percent higher per year, we estimate that insolvency will occur in 2038—five years earlier.Because the difference between inflation for seniors and for workers was lower in the later part of our sample period, it seems reasonable to consider the 0.38percent difference for the entire period as an upper bound on the future difference between the two indexes. Thus, our estimate of CPI-E indexation accelerating OASI insolvency by five years can likewise be thought of as an upper bound. Similarly, because seniors experienced higher inflation in all but one of the past eighteen years, our assumption of zero higher inflation for them in the future can reasonably be thought of as a lower bound. Therefore, our estimate of insolvency two years sooner—derived from the later years of our sample data—offers our best approximation for the future, given recent trends.Limitations of Our StudyOur analysis has several limitations that warrant addressing. For one, it is unclear just how accurate our measurements of inflation for seniors are, since the BLS acknowledges that the sample of older Americans associated with the CPI-E is small.11 Thus, the weights used to calculate the index are potentially inaccurate, suggesting that our observed average difference in inflation of 0.38percent is inaccurate as well. Even so, it is unlikely that our fundamental observation—that seniors have experienced higher than average inflation—is inaccurate, since much of the higher inflation for seniors is attributable to medical care, an observation that we know to be reasonable. Correcting for the small sample might affect the magnitude of the difference somewhat, but in all likelihood it would not affect the sign of the difference.12A second limitation is the scope of the CPI-E sample. The sample now consists of persons sixty-two and older, whereas OASI benefits are paid to many spouses and other, younger relatives of former beneficiaries, as well as to the retirees. There is no reason to believe that the relatives of former beneficiaries, particularly the younger ones, have expenditure patterns that match those of people sixty-two and older. Furthermore, not everyone sixty-two and older actually receives OASI benefits, although these individuals could be included in the CPI-E sample.13Third, even if the CPI-E accurately measures the cost of living for OASI beneficiaries, our specific estimate of trust fund insolvency might still be high. This is because the Social Security Administration already predicts a higher rate of inflation for future benefit adjustments, 3.0percent per year, than the roughly 2.5percent experienced in the past two decades.Thus, if current inflation trends continue, future benefits forecasted by the Social Security Administration would be too high. This scenario implies that the point of insolvency would be later than currently predicted, both for the SSA’s estimate using the CPI-W as well as for ours using the CPI-E.Finally, our estimate does not incorporate the effect that expected higher benefits might have on retirement decisions. If the CPI-E was adopted, more people might retire at sixty-two instead of sixty-five. Such early retirements presumably would increase the burden on the OASI trust fund, which could bring about insolvency even sooner. Indeed, it is unclear just how prevalent this phenomenon would be, and, more significantly, how much it would burden the fund. A detailed examination of this subject would certainly be worthwhile.ConclusionsIt is widely acknowledged that the social security system is likely to run into serious funding problems—up to and including insolvency—sometime in the middle years of this century. This analysis considers the implications to the system and to retirees of basing cost-of-living adjustments to benefits on a consumer price index for elderly consumers, rather than on the current index for workers.We find that inflation as measured by the index for the elderly has been consistently higher than inflation as measured by the index for wage earners, with a 0.38percent average annual difference since 1984. Much of the difference can be attributed to medical care, which constitutes a much larger share of total expenditures for the typical senior. Accordingly, we estimate that if inflation for the elderly continued to be higher than inflation for workers, and if reindexing of benefits were to start today, the effect over the next forty years would be to increase social security expenses and move the trust fund as much as five years closer to insolvency than currently projected. The actual outcome would depend on how persistent higher inflation for seniors is in the future. The trade-off facing policymakers, therefore, is between prolonging the solvency of the social security trust fund and maintaining the purchasing power of seniors over time.

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Congresswoman Brown has it right. Social Security will be just fine even with Chain E raising benefits with just a few tweaks. The one mentioned here and in Congress is raising the cap of payroll tax payment. Right now people earning over $106,000 are not taxed as everyone else and need to be. That alone would bring Social Security to where it needs to be in the long term. Increasing payroll tax just 1% overall would assure solvency through this century. So, we have many different people calculating the Trust fund level and its longevity----right now I do not trust those counting the Trust. We know all of the payroll taxes since Reagan have been placed in the US Treasury and not the Trust and Reagan tripled payroll taxes just to make sure there would be enough for when baby boomers retired so it seems odd we do not have enough now.

As Congresswoman Brown states -----Social Security is a benefit that protects women the most and we do not want it privatized as neo-liberals and neo-cons are trying to do.

OBAMA'S 'MY RA' IS THAT PRIVATIZED STRUCTURE REPUBLICANS HAVE BEEN TRYING FOR DECADES TO IMPLEMENT TO END SOCIAL SECURITY.

Congresswoman Corrine Brown currently represents Florida’s Fifth Congressional District. She serves as the Ranking Member of the House Committee on Transportation & Infrastructure’s Subcommittee on Railroads, Pipelines and Hazardous Materials, and as a senior member on the Committee on Veterans Affairs.

Social Security

Ever since the Democrats created the Social Security System in 1935, it has not only formed the centerpiece around which Americans plan their retirement, but has provided piece of mind by providing benefits to both disabled workers and the children and wives of deceased beneficiaries. Currently over 3 million Floridians are receiving Social Security benefits. Including over 100,000 in my District alone.

Social Security is especially important to the millions of women who rely on it to keep them out of poverty. Elderly unmarried women, including widows, get over 50 percent of their income from Social Security. Women tend to live longer and tend to have lower lifetime earnings than men do. They spend an average of 11.5 years out of their careers to care for families, and are more likely to work part time than full time, and when they do work full time, they earn an average of 70 cents for every dollar men earn. These women are our mothers, our wives, and our daughters - and we must save Social Security for them.

Social Security benefits are also crucial to the poor and people of color; Approximately 49 percent of African-American beneficiaries rely on Social Security for 90 percent or more of their income.

Let’s be clear. There is no immediate crisis in Social Security’s solvency and it does not contribute to the deficit. If Congress does nothing, Social Security will deliver full guaranteed benefits until at least 2037. Even after 2037, without any changes, the trust funds can pay more than 75% of benefits. That said, Congress would be prudent to begin modifying the program’s structure well before the shortfall begins.

In order for it to remain politically popular, however, Social Security must not be seen as a “welfare program.” For example, if all wages above $106,800 in 2009 were taxed and counted toward benefits, Social Security would remain 95% solvent for the next 75 years. High earners and their employers would pay more, but these top earners would also receive higher benefits. Thus, the program would continue to serve as an investment for all Americans and garner broad legislative support.

I remain strongly opposed to any plan that privatizes Social Security.I have always fought against putting Social Security funds into the stock market. The recession has shown how swings in the stock market could be devastating even for careful investors – let alone the millions of people without enough cash to open a mutual fund.

﻿I also oppose increasing the retirement age or cutting benefits for the middle class. Although average life expectancy has increased since Social Security was created, the life expectancy for working class people has not. Expecting them to work beyond age 65 is unnecessary and unjust.﻿

____________________________________________Indeed, as neo-liberals pretend to fight for Social Security Obama has used executive orders to begin building the structure to privatize Social Security----my RA. Has your pol been shouting that is what myRA is about? I hear nothing in Maryland. If your pol was indeed working to protect SS they would be in front of every camera and writing on their webpages how bad this policy is.

Remember, you do not have an election if a candidate runs for office on one platform and does just the opposite after elected. Obama has not made subtle changes----he is to the right of Bush. WE ARE NOT HAVING ELECTIONS IN THE US FOLKS----SAME THING HAPPENING IN MARYLAND POLITICS---

Keep in mind Obama is building this structure with the idea that any pol elected in 2016 will be a neo-liberal or a neo-con and continue to use this privatized plan.

﻿Wait, wasn't privatizing Social Security a bad thing when Bush proposed it...? now it sounds like Obama is proposing the exact same thing...

of course liberals cheer wildly when Obama says it.

'In offering his new "MyRa" proposal, the President said: "MyRA guarantees a decent return, with no risk of losing what you put in."Yes, and you can keep your doctor too.Fool me once, shame on you. Fool me twice, shame on the voters! That's the Savage Truth'!

Wednesday, Feb 5, 2014 07:43 AM EDTSalon

The quiet war on Social Security: Meet the dark side of MyRA

Some Democrats want to expand Social Security -- but a new effort to push 401(k)-style accounts poses a real threat David Dayen

You cannot understand the Obama administration’s new retirement savings account, known as “myRA” (short for my retirement account), without understanding the underlying dynamic inside the Democratic Party over retirement security. In this sense, myRA is a deliberate distraction from the emerging movement to expand Social Security, to ensure everyone has a measure of dignity in retirement. A year ago, the Social Security expansion movement was limited to dreamers, and had little to no clout on Capitol Hill. But thanks to some dogged determination, liberals began to recognize that the country stood at the precipice of a retirement crisis.Years of conversion from defined-benefit pensions to defined-contribution 401(k)-style plans made returns uncertain and subject to the vicissitudes of the stock market (as well as the greed of mutual fund managers, who subjected accounts to high fees, eroding the balances). Meanwhile, the savings rate plummeted amid stagnant wages (indeed, the savings rate is currently at historically low levels). What was once a three-legged retirement stool – pensions, savings and Social Security – had been whittled down to one. And the only viable way to avoid a disaster of baby boomer seniors falling into mass poverty is to expand the last leg of the stool, Social Security.This notion of expansion gradually began to pick up adherents, from activist organizations like MoveOn.org and the Progressive Change Campaign Committee to think tanks like the New America Foundation. In November, Elizabeth Warren endorsed expanding Social Security in a speech on the Senate floor. The expansion movement had some momentum, and tangible legislation from liberal Tom Harkin and moderate Mark Begich to rally behind.It is in this context that you must place the myRA policy. The Obama administration clearly heard the growing demand to do something about retirement. In a speech in Pittsburgh the day after the State of the Union address, President Obama said that “if you’ve worked hard all your life, you deserve a secure retirement,” adding that most workers don’t have a pension anymore, and while “a Social Security check is critical … oftentimes that monthly check, that’s not enough.”But instead of going ahead and endorsing Social Security expansion, Obama introduced myRA, a glorified savings account deducted from your paycheck in amounts as little as $5. It’s portable from job to job, and it earns a small amount of interest, the same as the Thrift Savings Plan for government workers. The account can never go down in value, and it’s backed by the full faith and credit of the U.S. government. Plus, you can withdraw the funds whenever you want without a penalty.This is a nice thing to have, but has little to do with retirement. Americans don’t need a new savings account vehicle; they need higher wages so they can actually manage to save a few dollars out of every paycheck. The accounts are capped at $15,000: After that, the account holder must roll them into a Roth IRA, subjecting the money to the whims of the market – and handing it over to Wall Street fund managers. You can see myRA in this context as a veal fattening pen for small savers before they get led into the Wall Street slaughterhouse. The administration has yet to finish the Department of Labor’s fiduciary rule, which would force investment advisers to act in the best interests of their clients. Until that gets done, it’s foolhardy to funnel more savings into Wall Street’s hands.The administration would tell you that the myRA is a small-ball solution merely because it was all they could accomplish without Congress’ involvement, and that it’s a good first step, to get people to think about saving for retirement. But you have to understand what the administration wants Congress to do about retirement security. The president said it in his Pittsburgh speech: “Let’s fix an upside-down tax code that right now gives the wealthiest Americans big tax breaks to save, but does almost nothing for middle-class folks, doesn’t give them the same kinds of tax advantages … And we need to give every American access to an automatic IRA on the job, so they can save at work.”The president rightly calls out retirement tax preferences that flow to the wealthy; in fact, these subsidies are massive – over $140 billion a year – and the New America Foundation study on expanding Social Security identifies them as a source of revenue that could pay for the entire expansion. But that’s not what the president wants to do. He wants the middle class to get the same kind of subsidies so they can open their own IRAs – automatically enrolled IRAs, in fact (a behavioral economics nudge, to force people to invest). He wants to double down on a failed system where retirement savings are leashed to the stock market.That’s the real battle over retirement security inside the Democratic Party. The Obama wing wants the private market – in this case, private retirement accounts – to solve the problem, while the progressive wing wants government to act and deliver a defined benefit through Social Security. Given that Social Security, even in its current state, is the most effective anti-poverty program in America, and 401(k)-style accounts have hastened a crisis, I know which approach I would choose.It’s pretty clear, then, that myRA is an effort to distract from the burgeoning Social Security expansion movement,﻿ offering an alternative that remains grounded in the private market, to throw liberals off the trail. In fact, in a perfect example of how allergic the administration is to using government solutions in this area, even the myRA – a simple savings account – will be run by a private-sector money management firm. ﻿﻿The White House chooses not to see how a government program that has been efficiently run for over 75 years can do the job of delivering dignity in retirement, without having to build a better mousetrap.It’s fine to want to make the current mess of the employer-based retirement account system better – the aforementioned Tom Harkin has a bill to do just that – but liberals shouldn’t take their eye off the prize. They have the simplest, easiest-to-explain solution to this crisis: expand Social Security, and use the hundreds of billions in retirement tax preferences to pay for it. Anything less is a poor substitute.﻿_______________________________________________

Heather Mizeur is taking Obama's my RA privitization of Social Security to the state level with her version of retirement savings that will eventually eliminate the state contribution to payroll tax payments. Remember, your Social Security payroll contributions have both a Federal and State contribution, so Mizeur is working with Obama in privatizing both.

Mizeur is a neo-liberal running as a progressive. Ending Social Security---how progressive is that?

Sure we face an unsure future Heather----Wall Street is stealing all of our wealth assets----AS YOU KNOW!

Simply rebuilding our domestic economy to end the capture global corporations have on our economy will end the boom and bust recessions. Simply rebuilding oversight and accountability to recover tens of trillions of dollars in wealth assets stolen through corporate fraud will send our wealth back to you and me.

Provide a Secure Retirement for All Marylanders

After working for their entire lives, Marylanders deserve a secure and dignified retirement. Under our current system, too many workers face an uncertain future. By establishing a state-run savings option, we can make it easier and more affordable for Marylanders to save for a secure retirement.Read Heather's plan to create a state-run retirement savings fund.